Clipped from: https://www.thehindubusinessline.com/opinion/musk-looks-unstoppable/article69001463.ece
With Nasdaq at record highs and Tesla stock soaring, Elon Musk’s fortune could touch half a trillion dollars sooner than later
There’s only one question left about Elon Musk: Will his wealth streak to $500 billion in the next day or two? Or will he hit that magic figure sometime early next week? He could keep climbing even after January 20 when Donald Trump is sworn in as the 47th US President.
Musk, at 53, has already eclipsed all other modern-day mega-billionaires by a long stretch. Just last week, he turbocharged past $400 billion on December 11. He quickly climbed to $447 billion, then made another stratospheric leap to $486 billion, according to the latest Bloomberg Billionaires Index. On Tuesday alone, he added $19.2 billion to his fortune, followed by another $12 billion on Wednesday. Since Trump’s presidential election win, Musk has become a staggering $182 billion richer.
Musk’s meteoric rise has been propelled by the tech-heavy Nasdaq exchange which crossed the 20,000-mark for the first time last week. Yet Musk, who says the “ultimate success is building a civilization on Mars” and aims to retire on the red planet, is clearly in a league of his own. His fortune dwarfs those of other mega-billionaires like Amazon’s Jeff Bezos ($251 billion) and Meta’s Mark Zuckerberg ($221 billion), whose combined wealth still falls short of Musk’s total.
But Musk, Bezos, and Zuckerberg aren’t the only players in this high-stakes billionaire race. Nvidia’s Jensen Huang, ranked 12th with $115 billion, trails far behind the frontrunners but has still added an astonishing $71 billion in 2024. Meanwhile, Oracle’s Larry Ellison, a fixture on rich lists since the 1990s, is now worth $194 billion, gaining $70 billion this year alone.
On the home front, both Reliance chairman Mukesh Ambani and Adani Group head Gautam Adani, have fallen out of Bloomberg’s elite $100-billion club this year. Ambani’s energy and retail sectors have been struggling with rising debt while Adani’s empire has been buffeted by US bribery charges which the billionaire has denied.
To be sure, Musk’s flagship companies, Tesla and SpaceX, are thriving. But the big question is whether their astronomical valuations are driven by intrinsic value — or by the so-called “Trump Effect”, with Musk cosying up to the incoming president at Mar-a-Lago and having a direct Oval Office line.
Could this proximity to Trump lead to further benefits, propelling Musk toward becoming the world’s first modern-era trillionaire? There is speculation that Trump will remove tax credits for electric vehicles that boosted sales of Tesla rivals while SpaceX derives most of its earnings from government contracts. Trump has been pitching Musk’s ambition of putting spacemen on Mars.
Does that sound far-fetched? Consider this: Musk is a founding member of the “PayPal Mafia”, alongside Silicon Valley heavyweights like Peter Thiel and Reid Hoffman (the LinkedIn founder).
Hoffman, who backed Kamala Harris rather than Trump, sold LinkedIn for $26 billion and has since invested in major start-ups like Airbnb as a venture capitalist. Notably, JD Vance, the vice president-elect, once worked for Thiel’s Mithril Capital.
Crypto market
Musk’s close ties to the incoming administration have also supercharged the cryptocurrency market. Bitcoin, the flagship cryptocurrency, was valued at $60,858 on October 1. By December 5, it had blasted through the $100,000 mark and climbed further to $107,487 on Monday.
Cryptocurrency markets are flashing green. MicroStrategy, a software company with substantial Bitcoin holdings, has been added to the Nasdaq 100, giving the index “indirect exposure” to Bitcoin. Presto Research even predicts Bitcoin could hit $210,000 by 2025.
Still, Musk’s success isn’t solely tied to the Trump Effect. SpaceX, now valued at an eye-popping $350 billion, has achieved 420 successful launches with only three failures — a remarkable track record. Even more impressive, its Falcon boosters have successfully landed 384 times out of 396 attempts. This ability to reuse boosters allows SpaceX to launch payloads at rates competitors can’t match.
Crucially, SpaceX’s Starlink now has 6,784 satellites in low-Earth orbit, generating an estimated $6.6 billion in revenue this year. That figure could surge to $11 billion next year, potentially making the company highly profitable.
On Earth, Tesla’s stock is also racing ahead. Its share price has surged 71 per cent to $424, heavily greased by Trump’s election win.
All of this assumes the stock market won’t collapse in the coming months. Ruchir Sharma, chair of Rockefeller International, has warned the US market is heading for a downturn. He’s described it as “the mother of all bubbles,” though he also acknowledges there’s little sign of an imminent deflation.
If this is indeed a giant bubble, valuations — including Musk’s — could come crashing down. But if the rally continues, Musk is almost certain to break the $500-billion barrier in the very near future.
Musk’s flagship companies, Tesla and SpaceX, are thriving.
But the big question is whether their astronomical valuations are driven by intrinsic value
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